Innovation networking has become both more feasible with improved telecommunication and more important as it usually produces research of higher quality. However, the spatial distribution of academic networks and innovative networks are not uniform. Despite overwhelming evidence on the benefits of collaboration, patent data from 1994-2001 in Sweden demonstrate that innovation networks are not very common. In addition, the pattern of innovative networks is very fragmented. Our results indicate that innovation networks are more likely to exist in densely populated areas with a diversified industry. Face-to-face contacts in such areas seem to promote networking. Moreover, science-oriented industries appear to benefit more from proximity to universities when it comes to collaboration. However, the size of the market does not matter at all when it comes to collaboration, more important is the density and diversity of the market.